The U.S. economy entered 2026 with sharply reduced momentum—Q4 2025 GDP was revised down to 0.5% annualized from 4.4% in Q3—while inflation remained stubbornly elevated. February PCE data showed headline inflation at 2.8% year-over-year and core PCE at 3.0%, with monthly increases of 0.4% in both measures. This growth-inflation tension has created an unresolved macro contradiction for Bitcoin and risk assets: the slowdown suggests easier Fed policy is needed, but sticky inflation prevents immediate relief. Bitcoin traded around $71,000 amid the news, with spot ETF inflows of roughly $470 million on April 6 providing a significant counterweight. Rising oil prices, elevated real yields, and a resilient but softening labor market add layers of complexity. The next 30-90 days of inflation, employment, and GDP prints will likely determine whether the macro backdrop evolves into a benign disinflationary scenario or a stagflationary trap, with Bitcoin’s next sustained move depending on which side of the tension gives way first.

According to CME FedWatch data, the probability of the Fed maintaining rates in July stands at 69.5%, with a 30.5% chance of a 25bp hike. By September, the probability of no change drops to 40.4%, while the chance of a 25bp hike rises to 46.9% and a 50bp hike reaches 12.8%. These shifting rate expectations could influence crypto market sentiment as traders adjust to a potentially more hawkish Fed stance.

Ethereum broke through the $1,600 resistance level on June 27, according to HTX market data, currently trading at $1,602 with a 24-hour gain of 1.6%. The breakout signals strengthening short-term bullish momentum, with market participants closely watching whether the level can hold.

Morgan Stanley maintains its baseline forecast that the Fed will keep rates unchanged for the rest of 2026, but highlights that if unemployment drops below 4% or core inflation remains above 0.3% month-on-month, the risk of rate hikes rises sharply. Analyst Michael Gapen notes that falling oil prices and peaking tariff pass-through temporarily support the 'no hike' stance, but a tight labor market or renewed Middle East conflict could force a policy shift. The crypto market must closely monitor employment and inflation data, as rate hikes would tighten global liquidity and pressure risk assets like Bitcoin.

According to Gate exchange data, spot gold surged nearly $30 shortly after the release of the US PCE price index, currently trading at $4,010 per ounce. The PCE is the Federal Reserve's preferred inflation gauge, and the market reacted swiftly, pushing gold prices higher.

Bitcoin falls toward $62,000 and Ethereum breaks below $1,700, both losing nearly 20% in 30 days. Hawkish Fed signals, the collapse of US-Iran ceasefire talks, and Deribit's ~$10.6 billion options expiry weigh on sentiment. Traders await Thursday's PCE data and ETF flow reversal.

Bitget CFD Chief Analyst Lewis Huang said this week's market focus will be on the US May PCE price index and Q1 GDP final. Previous CPI and PPI hit new highs, nonfarm payrolls remained solid, and rising inflation combined with the Fed's hawkish stance have led the market to gradually price in rate hike expectations. If PCE surprises to the upside, the dollar will gain momentum and gold, as a non-yielding asset, may face weakening risk.

QCP Capital's market analysis indicates Bitcoin has reclaimed $65,000, driven by Strategy's purchase of 520 BTC and a $300 million cash reserve increase. While liquidity concerns have eased, the overall risk asset environment remains complex, with crypto still range-bound. This week's PCE data and quarter-end rebalancing may trigger volatility.